Paper flipping houses is an excellent way to break into the real estate market without dealing directly with renovations or managing tenants. By facilitating deals between sellers and buyers, you can earn quick profits. However, success requires a solid strategy and focus.
Here are three tips to help you master the art of paper flipping houses.
1. Build Strong Relationships with Motivated Sellers
The foundation of successful paper flipping lies in finding motivated sellers. These individuals are often dealing with financial difficulties, probate properties, or sudden relocations.
How to Find Sellers: Use direct mail campaigns, driving for dollars, or online advertising to reach potential leads.
Pro Tip: Most often people motivated sellers are dealing with various financial or other issues, always approach sellers with empathy and professionalism, as building trust can lead to smoother deals.
Find Motivated Sellers
2. Master Deal Evaluation
Not all deals are profitable. Learning how to quickly and accurately evaluate potential contracts is a critical skill.
The Basics: Use formulas like the 70% rule to calculate the maximum allowable offer (MAO) after considering repairs and potential profit margins. The formula = After Repair Value (ARV x .70) - Repair costs = MAO
Pro Tip: Familiarize yourself with comparable sales (comps) in the area to confirm property values.
3. Build and Nurture Your Buyer’s List
Having a strong buyer’s list ensures you can quickly assign contracts once you’ve secured a deal.
How to Grow Your List: Attend real estate networking events, use social media, put out yard signs, use Propstream, and connect with local investors.
Pro Tip: Keep an updated database of buyers’ preferences, such as property type and price range, for faster matching.
By implementing these strategies, you’ll position yourself as a successful wholesaler in the competitive world of paper flipping houses. With consistent effort and smart planning, you can achieve substantial results and grow your real estate business.
The information in this article are of the opinion and experience of the author. Due diligence should always be done before before investing in real estate.
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